Commercial Due Diligence

Particularly in recent years, the automotive industry has been undergoing a historic transformation driven by technological change and international trade conditions. To adapt to these challenges, even established companies must rethink their business models. 

Commercial due diligence helps identify whether and which measures need to be taken to adapt to these changes in a sustainable manner.

The objective of a Commercial Due Diligence is to evaluate and optimize the alignment of corporate objectives with the market.

A Commercial Due Diligence entails specific, clearly defined tasks. The starting point is a company’s existing business model. While this model is usually defined with relative clarity, in the case of "young" companies, the situation is often less clear-cut for companies that have been established for many years — a result of various adjustments made to their product portfolios and/or target markets.

As part of a Commercial Due Diligence, the business model is evaluated with a focus on three primary objectives: strategy, organization, and operational processes.

During this assessment, the industry structure, the competitive landscape, and the company's own market positioning are analyzed in depth. This process enables an objective assessment of the actual market opportunities.

Internally, the due diligence process examines the company's relationships with suppliers and key customers. Furthermore, compliance with regulatory requirements and relevant macroeconomic factors are taken into account.

In the final phase, the gathered information—particularly with regard to the projected outcomes—is cross-referenced with the business plan. Based on the market data collected, it is possible to determine whether the company's current objectives remain achievable; additionally, recommendations are formulated regarding necessary adjustments to the market and product strategies, as well as the associated internal processes.

Broadly speaking, two prerequisites are indispensable for conducting a Commercial Due Diligence: a solid understanding of the product and the target market, and comprehensive knowledge of corporate structure and organization.